Morning journal and courier., 1887-03-10
HON. JOHN JAY KNOX

on Legal Tender in the United States
 A Lecture by Ex-Unfted States
 ComptrOIler Knox at North Sheffield
 Hall.
 Hon. John Jay Knox, president of the National Bank of the Republic, New York
 city, and an ex-comptroller of the United
 States currency, delivered lecture in North
 Sheffield nall last evening before large au-
 dience, which included many prominent New
 Haven gentlemen, on the subject Legal
 Tender in the United States" The lecture
 was given under the auspices of the Yale
 Faculty of Political Science. Mir. Knox be-
 gan by saying that legal tender was the most
 important and the most dangerous kind Of
 currency. Previous to the adoption of the
 constitution legal tender had been issued by
 all the colonies, and had depreciated as the
 quantity increased. At first it was equal to
 coin, and when depreciation began new issues
 were made with which to redeem the previ-
 ous ones. These issues were three in num-
 her and were respectively called Old Tenor, New Tenor and Middle Tenor. These issues were not favorably regarded by England, and Parliament prohibited further issues. Thus arose the. love for paper money, being bone of our bone and flesh of our flesh. Our fathers were in favor of unlimited issues, were. in short, Greenbackers. This love for paper money had as much to do in bringing about the revolution as had the subject of taxation without representation.
 The first issues of the continental Congress depreciated so that it became absolutely worthless. There was, in these issues Of paper, loss of about $196, ,000, 900. There was, therefore, decided opposition in the Federal convention to the adoption of any o1a ba Oiv Congress to create legal tender. And the clause in the constitution prohibiting paper money is important, because 1t IS the hrst or it's kind. During the war of 1812 notes were issued bearing interest, but they passed out of circulation almost as soon as emitted It was a fatal precedent, however. In '37 notes of the same kind were circulated, but did not last, for they were not intended to be money. Up to the time ot CIVIL war no promises to pay were issued, but bonds rather instead. In 1662 the first notes were issued these were taken back, but this statute was repealed. The act making these legal tender was declared unconstltu- tional by the Supreme court, but the decision was reversed. Now again it has been de- clared unconstitutional by the same court The war issues have swollen our natlonal debt great deal by their depreciation MT. Knox than gave brief account or events III the war that led to ths issues of irredeema- ble paper and also of the various kinds of notes and monies in circulation, from the legal tender postage stamp to the 7-3O bonds: He described the successful management of
 the currency by McCulloch, Sherman and
 their successors, and the great excitement and discussions by the act of resumption. He then discussed the power of Congress to issue irredeemable paper money, declaring that it violated the constitution by issuing paper
 and making the people receive the depreei-
 ated currency. He quoted extensively from
 the debates by Sumner, Fessenden, Cox and others, also from Webster and Story, against
 that power. He attributed the decision ot | the Supreme court to ignorance of the his- tory of legal tender and of debates on the subject He inveighed strongly against the present silver dollar-declared that if it was to circulate it's value should be regulated by the worlds market and not by statute